Freddie Mac Sells $104 Million in Non-Performing Loans

Rhea-AI Summary

Freddie Mac announced the sale of 679 non-performing loans worth $104 million through an auction. The sale is part of Freddie Mac's Standard Pool Offerings (SPO®) and is expected to settle in June 2024. The winning bidder is RCAF Loan Acquisition, LP managed by Pretium Residential Credit Management,

Awards SPO Pool to One Winner

MCLEAN, Va., April 09, 2024 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today announced it sold via auction 679 deeply delinquent non-performing residential first lien loans (NPLs) from its mortgage-related investments portfolio. The loans, with a balance of approximately $104 million, are currently serviced by Specialized Loan Servicing LLC and NewRez LLC, d/b/a Shellpoint Mortgage Servicing. The transaction is expected to settle in June 2024. The sale is part of Freddie Mac’s Standard Pool Offerings (SPO^®). Freddie Mac, through its advisors, began marketing the transaction on March 6, 2024, to potential bidders, including non-profits and Minority, Women, Disabled, LGBTQ+, Veteran or Service-Disabled Veteran-Owned Businesses (MWDOBs), neighborhood advocacy organizations and private investors active in the NPL market. Bids for the upcoming Extended Timeline Pool Offering (EXPO), which is a smaller sized pool of loans, are due from qualified bidders by April 25, 2024.

For the SPO^® offering, the loans were offered as one pool of mortgage loans. The pool consists of mortgage loans secured by geographically diverse properties.

Given the delinquency status of the loans, the borrowers have likely been evaluated previously for loss mitigation, including modification or other alternatives to foreclosure, or are in foreclosure. Mortgages that were previously modified and subsequently became delinquent comprise approximately 47 percent of the aggregate pool balance. Additionally, purchasers are required to honor the terms of existing loss mitigation agreements and solicit distressed borrowers for additional assistance except in limited cases and ensure all pending loss mitigation actions are completed.

The SPO pool and winning bidder is summarized below:

Description	Pool #1
Unpaid Principal Balance	$ 103.7 million
Loan Count	679
BPO-weighted* CLTV (in %)	42
UPB-weighted CLTV (in %)	52
Average Months Delinquent	29
Average Loan Balance (in $000s)	152.8
Geographical Distribution	National
Winning Bidder	RCAF Loan Acquisition, LP (managed by Pretium Residential Credit Management, LLC)
Cover Bid Price (% of UPB) (second-highest bid price)	Around 100s Area

^{*Broker Price Opinions (BPOs)}

Advisors to Freddie Mac on the transaction are BofA Securities, Inc. and First Financial Network, Inc., a woman-owned business.

Freddie Mac’s seasoned loan offerings focus on reducing less-liquid assets in the company’s mortgage-related investments portfolio in an economically sensible way. This includes sales of NPLs, securitizations of re-performing loans (RPLs) and structured RPL transactions. Since 2011, Freddie Mac has sold $10.2 billion of NPLs and securitized approximately $78.3 billion of RPLs consisting of $30.4 billion via fully guaranteed MBS, $35.5 billion via the Seasoned Credit Risk Transfer (SCRT) program, and $12.4 billion via the Seasoned Loans Structured Transaction (SLST) program. Requirements guiding the servicing of these transactions are focused on improving borrower outcomes and stabilizing communities. Additional information about Freddie Mac’s seasoned loan offerings is available at http://www.freddiemac.com/seasonedloanofferings/.

Freddie Mac’s mission is to make home possible for families across the nation. We promote liquidity, stability, affordability and equity in the housing market throughout all economic cycles. Since 1970, we have helped tens of millions of families buy, rent or keep their home. Learn More: Website | Consumers | LinkedIn | Facebook | Instagram | YouTube

MEDIA CONTACT: Fred Solomon
703-903-3861
Frederick_Solomon@freddiemac.com

FAQ

How many non-performing loans did Freddie Mac sell in the auction?

Freddie Mac sold 679 non-performing loans in the auction.

What is the total balance of the non-performing loans sold by Freddie Mac?

The total balance of the non-performing loans sold by Freddie Mac is approximately $104 million.

When is the settlement expected for the auctioned non-performing loans?

The settlement for the auctioned non-performing loans is expected to occur in June 2024.

Who is the winning bidder for Freddie Mac's Standard Pool Offerings (SPO®) auction?

The winning bidder for Freddie Mac's SPO® auction is RCAF Loan Acquisition, LP managed by Pretium Residential Credit Management,

What is the role of Specialized Loan Servicing and NewRez in the auctioned non-performing loans?

Specialized Loan Servicing and NewRez currently service the auctioned non-performing loans.